Independent Workers Union of Great Britain (Appellant) v Central Arbitration Committee and another (Respondents)

1. The decision of the CAC was principally concerned with the question whether the Riders fell within limb (b) of section 296. Nevertheless, the decision contains useful findings as to the work carried out by the Riders and the terms and conditions of their relationship with Deliveroo.

1. Deliveroo was founded in 2013 in London and at the time of the CAC had operations in approximately 150 cities worldwide. Its business involves the delivery of food and drink items from restaurants and others, to whom it refers as partners, to customers’ homes or to other premises such as offices. Deliveroo enters into commercial agreements with the restaurants and other partners by which it agrees to deliver food and drink items supplied by them to customers. It enters into what it describes as “supplier agreements” to arrange the delivery of the food and drink items with individuals who mostly use bicycles, scooters and motorcycles (paras 34-35).

1. Shortly before the first hearing before the CAC, Deliveroo introduced new contracts for its Riders in its CKT zone. In its decision the CAC noted that some of the earlier contracts were still in force but Deliveroo was encouraging Riders on the earlier contract to change to the new contract and newly recruited Riders were required to sign the new contract. The parties before the CAC agreed that it should consider the question of worker status by reference to the new contract and not the earlier contract. The CAC, therefore, at the request of the parties, considered the position as at May 2017 and ongoing under the new contract and the position in practice. It noted that both the contractual terms and the position in practice under the earlier contract were markedly different from the new contract. The earlier contract involved much more control and direction by Deliveroo, including strict uniform requirements, a different attitude to substitutes and in other significant respects. It found, however, that both the written contractual terms and how the parties conducted themselves had changed with the introduction of the new contract. The CAC appears to have accepted Deliveroo’s submission that the new terms were permissible even if they had been introduced by Deliveroo to defeat this claim and to prevent the Riders from being classified as workers: see para 99. The CAC considered that what had happened previously was of historical interest only and of little assistance in understanding the current situation (para 86).

1. The terms of both the earlier and new contracts, and indeed all contracts with riders generally that have been issued at any time by Deliveroo, are set by Deliveroo and there is no scope for individual negotiation. Deliveroo issued the new contracts to existing Riders on 11 May 2017 with a covering letter which specifically drew attention to the substitution clause:

   “You will see that this agreement means you still have the ability to appoint another person to work on your behalf with Deliveroo at any time. A substitute working for you can log in using your phone or rider app details. But we request that you never ‘swap orders’ with another app user as this can prevent the customer from receiving accurate GPS data to track where their order is.”

The covering letter also informed Riders that they could work for other companies including competitors and that there would be “no requirement to wear Deliveroo branded kit while you work with us”. Previous restrictions on wearing competitor clothing and an obligation to wear at least one piece of Deliveroo branded equipment were not included in the new contract.

1. The principal terms of the new contract relevant to the issues on this appeal included the following:

   1. Clause 2.2 of the new contract defined “services” as “the collection by you of hot/cold food and/or drinks (‘Order Items’) from such restaurants or other partners … as are notified to you through the Deliveroo rider app (‘App’), and the delivery of such Order Items by bicycle, car, motorbike or scooter to Deliveroo’s customers at such locations as are notified to you through the App”.

   1. The new contract stated that the Rider is “not obliged to do any work for Deliveroo, nor is Deliveroo obliged to make available any work to you. Throughout the term of this Agreement you are free to work for any other party including competitors of Deliveroo”.

      1. While logged into the App, you can decide whether to accept or reject any order offered to you and if you do not wish to receive offers of work at any time, you can use the ‘unavailable’ status.

      1. When you choose to provide Services you should:

      1. When you have accepted an order, go to the Partner to collect the order items. You should then deliver the Order Items to the customer. In both instances, you should complete the Services within a reasonable time period, using any route you determine to be safe and efficient.

      1. Be professional in your dealings with Deliveroo staff, other riders, restaurant personnel and members of the public while providing the Services, and provide the Services with due care, skill and ability.”

      “ … 2.4 It is entirely up to you whether, when and where you log in to perform deliveries, save that it must be in an area in which Deliveroo operates and at a time when that area is open for deliveries.

   1. Clause 3 required Riders to provide the equipment necessary to provide the Services “including your own phone; and bicycle, car, motorbike or scooter” which were to be maintained in roadworthy condition while providing Services. Riders were required to use food transportation equipment which meets Deliveroo’s safety standards.

   1. Riders were paid on a fee per delivery basis. Clause 4 set out that payment was for each completed delivery. Deliveroo was to prepare a draft invoice on a fortnightly basis in respect of the services in the previous fortnight provided by the Rider or their substitute. Riders were free to create and submit their own invoices. Riders were free to keep any gratuities paid directly to them. The new contract stated that “as a self-employed supplier you are responsible for accounting for and paying any tax and national insurance due in respect of sums payable to you under or in connection with this Agreement.”

   1. Riders were required by clause 5 to provide warranties including the right to residency and work in the United Kingdom, the absence of unspent convictions and compliance with all legal conditions.

   1. Riders were responsible for obtaining third party liability insurance for themselves. The new contract provided that “any substitute appointed by you need not have their own insurance as long as they are covered under your insurance.”

   1. Clause 8 provided in relation to the right to appoint a substitute:

      1. Deliveroo recognises that there may be circumstances in which you may wish to engage others to provide the Services. Deliveroo is not prescriptive about this and you therefore have the right, without the need to obtain Deliveroo’s prior approval, to arrange for another courier to provide the Services (in whole or in part) on your behalf. This can include provision of the Services by others who are employed or engaged directly by you; however, it may not include an individual who has previously had their Supplier Agreement terminated by Deliveroo for a serious or material breach of contract or who (while acting as a substitute, whether for you or a third party) has engaged in conduct which would have provided grounds for such termination had they been a direct party to a Supplier Agreement. If your substitute uses a different vehicle type to you, you must notify Deliveroo in advance.

      1. It is your responsibility to ensure your substitute(s) have the requisite skills and training, and to procure that they provide the warranties at clause 5 above to you for your benefit and for Deliveroo’s benefit. In such event you acknowledge that this will be a private arrangement between you and that individual and you will continue to bear full responsibility for ensuring that all obligations under this Agreement are met. All acts and omissions of the substitute shall be treated as though those acts and/or omissions were your own. You shall be wholly responsible for the payment to or remuneration of any substitute at such rate and under such terms as you may agree with that substitute, subject only to the obligations set out in this Agreement, and the normal invoicing arrangements as set out in this Agreement between you and Deliveroo will continue to apply.”

   1. The Rider may terminate the new contract at any time for any reason on giving Deliveroo immediate notice in writing and Deliveroo is required to give a Rider one week’s written notice of termination for any reason, and with immediate effect “in the event of any serious or material breach of any obligation owed by you (including … where such breach is the responsibility of any substitute engaged by you).”: (Clause 10).

   1. Clause 13.2 provided that the Agreement contained the whole agreement between the Rider and Deliveroo.

   1. Clause 13.3 provided that the Agreement was personal to the Rider and may not be assigned to a third party without Deliveroo’s express written agreement and stated “for the avoidance of doubt, this includes any substitute engaged by you in the provision of the Services”.

   1. Deliveroo does not provide a pension or other benefits such as life assurance and permanent health insurance to Riders.

1. The CAC made findings concerning how the parties conducted themselves in practice.

   1. Within zones such as CKT, there was no expectation or requirement that Riders would indicate in advance when they intended to work. Such Riders were not subject to any form of schedule. They operated exclusively on a “free log-in basis”, subject to a requirement that they perform at least once every three months.

   1. Riders with a CKT Ops Code were paid on a fee per delivery basis (“FPD”). They were normally paid £3.75 per delivery but this varied to some degree depending on demand.

   1. Riders could make themselves unavailable at any time unless they had already accepted an order which had not been delivered.

   1. When Riders marked themselves as available, the Deliveroo algorithm might start to offer them work if an order had been requested in the vicinity. If the Rider rejected an offer or did not respond within three minutes, the job would be offered to another Rider.

   1. When a Rider accepted an order, he or she would be told the details of the Partner where the food or drink was to be collected. Only on collection did they find out what the order consisted of and where it was to be delivered. The Deliveroo App would suggest a route for them, but they were not obliged to follow it. They were required to confirm that delivery had been made.

1. The CAC made findings as to how substitution operated in practice. It noted that there was no policing by Deliveroo of a Rider’s use of a substitute. Deliveroo simply relied on the contractual terms with the Rider. It found that in practice substitution is rare because there was no need for a Rider to engage a substitute. If the Rider did not want to accept a job or be available for work they did not need to log on to the App, or if they were logged on they did not need to make themselves available. If they were logged on and marked themselves as available they were not under any obligation to accept any jobs offered. While Deliveroo had a right of termination on one week’s notice for any reason, it did not terminate FPD contracts for not accepting a certain percentage of orders or for Riders not making themselves sufficiently available (although the position was different for hourly paid Riders). FPD Riders were, however, vulnerable to having their contracts terminated on one week’s notice if their, or their substitute’s, delivery times over a sustained period were considered too slow.

1. The CAC found that “a few, if that, Riders use substitutes”. Most Riders did not use a substitute as they did not need to do so. A Rider might allow a friend to use their App by providing the password. The confidentiality clause in the new agreement provided for the substitute to be told the password, but the Rider was responsible for the substitute maintaining confidence. The Rider was paid for any deliveries made by the substitute. Deliveroo was not aware of the identity of the substitute or the fact that one had been used on any particular occasion. The Rider was entirely responsible for the substitute, including insuring them. Remuneration of the substitute was a matter between the Rider and the substitute (paras 78-79).

1. While most Riders did not use a substitute, a few did. One who gave evidence explained that he regularly engaged a substitute, taking 15-20% of the fee he received from Deliveroo and passing on the balance to his substitute. Deliveroo did not object to this practice. The CAC also found one instance of substitution after the job had been accepted and before collection of the Order from the restaurant (paras 80-81). Deliveroo was planning to change the system to enable a Rider to cancel via the App after accepting (para 82).

1. The CAC found that some Riders were also signed up with other food delivery organisations. Deliveroo did not object to this. The covering letter accompanying the new contract stated:

   “We know that the vast majority of riders work with other companies as well as Deliveroo, including our competitors. That is fine with us: as an independent contractor you are free to work with whoever you choose.”

The Union did not accept that it was a vast majority, but accepted that a goodly proportion may work with other companies (para 83). The CAC found that some Riders could and did have several apps open at once, taking jobs as and when offered and maximising the chance of work. In practice, however, it would be tricky and risky to undertake simultaneous deliveries for different food delivery companies. Since delivery times were monitored and persistent slow deliveries were a cause of termination, there was a disincentive in doubling up orders for different companies (para 84).

1. The analysis of the CAC proceeded on the basis of limb (b) of section 296(1).

1. The CAC began by expressing its puzzlementon one issue. Given that Deliveroo stressed the total flexibility of its Riders’ ability to log in, as and when they wished, and to decline offers of a delivery, even when logged on, and even to abandon a delivery midway, why would the question of substitution ever arise? Furthermore, why would Deliveroo spend so much time, money and energy in selecting and training Riders when the Riders could then sub-contract the right to use the App as they chose? On behalf of the Union it had been submitted that there was, in reality, no substitution right. The “bland” response on behalf of Deliveroo had been that it was a matter for Deliveroo if it was willing to invest in training for its Riders, knowing that they could sub-contract whenever they chose. The CAC noted that one solution to the substitution conundrum was subcontracting for profit (para 99).

1. The CAC considered that “the central and insuperable difficulty for the Union” was that it had found the substitution right to be genuine in the sense that Deliveroo had decided that under the new contract Riders should have a right to substitute themselves at will both before and after they had accepted a particular job and that that had operated in practice (para 100). In light of its central finding on substitution, it could not be said that the Riders undertook to perform personally any work or services for another party for the purposes of section 296(1)(b) TULRCA (set out at para 19 above). That was fatal to the Union’s claim. A Rider would not be penalised by Deliveroo for not personally making the delivery herself or himself, provided the substitute complied with the contractual terms that applied to the Rider. The CAC noted that a high level of trust in the substitute was required in the Rider, because the substitute had to have the Rider’s phone or password to download the Rider’s App and because of the contractual obligations of the Rider in respect of the substitute. This limited the attractiveness of sub-contracting but did not make the substitution provisions a sham (paras 101-102).

1. In these circumstances, the CAC considered that it was unnecessary to dissect the other features of the contractual relationship between Deliveroo and its Riders; they were insufficient to compensate in the Union’s favour in light of the substitution finding. It concluded that the Riders were not workers within the statutory definition of either section 296 TULRCA or section 230(3)(b) of the Employment Rights Act 1996 (para 103).

1. It was only at this point that the CAC turned to consider the first issue which arises for consideration on this appeal. It simply stated:

   1. Mr Hendy made a secondary submission pursuant to article 11 ECHR and section 3 of the Human Rights Act [1998]. However, on the specific facts of this case and the unfettered and genuine right of substitution that operates both in the written contract and in practice, the argument does not succeed. In a less clear cut case the position might have been different.”

1. The CAC therefore rejected the Union’s application as the Riders were not workers within section 296 TULRCA.

1. Article 11(1) confers a number of different freedoms. In addition to a general freedom of peaceful assembly and a general freedom of association with others, article 11(1) confers a trade union freedom which applies in more limited circumstances. As a result, the trade union freedom may be regarded as a specific sub-set of the general freedom of association. Furthermore, the content of the trade union freedom has not remained a constant but has been expanded by interpretation by the Strasbourg court. Of particular significance in the present case is Demir v Turkey [2009] IRLR 766, where the Strasbourg court acknowledged for the first time that the trade union freedom includes a right to bargain collectively. This is discussed further below.

1. It is necessary therefore to ascertain the class of people who enjoy whatever rights fall within the scope of the trade union freedom and the right to bargain collectively. Initially, Lord Hendy KC on behalf of the appellant, submitted that these were conferred on everyone because article 11(1) expressly states that everyone enjoys the rights it confers. However, he later resiled from this submission and maintained that the right to bargain collectively is enjoyed by every individual with an occupational interest to protect. He submitted that if the objective is to improve by collective bargaining working terms and conditions, that involves the exercise of trade union rights. In particular, he denied that an employment relationship is a pre-condition to the enjoyment of trade union rights under article 11.

1. The Strasbourg Court considered the scope of the class of people who have trade union rights under article 11 in the leading case of Sindicatul “Păstorul Cel Bun” v Romania [2014] IRLR 49 (“The Good Shepherd”). Orthodox priests and lay employees of the Archdiocese of Craiova in Romania formed a trade union called “The Good Shepherd”. Its elected president applied to a court for the union to be granted legal personality and entered in the register of trade unions. This was opposed by the Archdiocese. At first instance the application succeeded but the decision was reversed and the trade union’s registration was revoked. The union then brought proceedings against Romania before the Strasbourg Court alleging that the refusal of its application for registration as a trade union had infringed its members’ right to form a trade union under article 11 ECHR. A chamber of the Third Section of the Court found a violation of article 11. At a further hearing before a Grand Chamber the Archdiocese argued that the emergence of such a body would imperil the freedom of religious denominations to organise themselves in accordance with their own traditions and would undermine the church’s traditional structure. It submitted that it was therefore necessary to limit the freedom to form and participate in a trade union. The Grand Chamber held that members of the clergy, notwithstanding their special circumstances, fulfilled their mission in the context of an employment relationship falling within the scope of article 11. It further held, however, that the Romanian court’s refusal to register the union was justified: there had been no violation of its members’ rights to form a trade union under article 11 because the interference had been prescribed by law, pursued legitimate aims and was necessary in a democratic society.

1. The particular significance of the decision for present purposes is the acceptance by the Grand Chamber that the right under article 11 to form a trade union could only arise where there was an employment relationship. In considering whether article 11 was applicable to the members of the union, the Court rejected the submission of Romania that members of the clergy must be excluded from the protection afforded by article 11 because they perform their duties under the authority of the bishop and therefore outside the scope of the domestic rules of labour law.

   “It is not the Court’s task to settle the dispute between the union’s members and the Church hierarchy regarding the precise nature of the duties they perform. The only question arising here is whether such duties, notwithstanding any special features they may entail, amount to an employment relationship rendering applicable the right to form a trade union within the meaning of Article 11.” (para 141)

1. It is particularly significant that the Grand Chamber stated (at para 142) that in addressing this question it would apply the criteria laid down in the relevant international instruments including International Labour Organization (“ILO”), Employment Relationship Recommendation, 2006 (No 198) (“ILO Recommendation No 198”). That Recommendation makes the point that the determination of such a relationship should be guided primarily by the facts relating to the performance of work and the remuneration of the worker, notwithstanding how the relationship is characterised in any contrary arrangement, contractual or otherwise, that may have been agreed between the parties. The Grand Chamber observed that the duties performed by the members of the trade union in question entailed many of the characteristic features of an employment relationship. It acknowledged that a particular feature of the work of members of the clergy was that it also pursued a spiritual purpose and was carried out within a church enjoying a certain degree of autonomy, and that members of the clergy were bound by a heightened personal duty of loyalty. It identified the question to be determined as whether such special features were sufficient to remove the relationship between members of the clergy and their church from the ambit of article 11. It concluded (at para 148):

   “Having regard to all the above factors, the Court considers that, notwithstanding their special circumstances, members of the clergy fulfil their mission in the context of an employment relationship falling within the scope of Article 11 of the Convention. Article 11 is therefore applicable to the facts of the case.”

1. Two further decisions of the Strasbourg Court on which the appellant initially relied are now accepted by Lord Hendy as not taking this issue any further. Sigurjόnssonv Iceland (1993) 16 EHRR 462 concerned the refusal of a taxi driver to join an automobile association which, inter alia, protected taxi drivers’ rights. The decision of the Court that there had been a violation of his right under article 11 not to be forced to join the association does not cast any light on the present issue as it was not necessary to decide whether the association could be regarded as a trade union within article 11. The case was decided on the basis that it fell within the wider right to freedom of association. Similarly, Ólafsson v Iceland (2010) 56 EHRR 21, where a master builder complained of a statutory levy payable to an association of which he was not a member which was required to use it for the promotion of industrial development, was decided on the basis of a violation of his right to freedom of association under article 11. Neither case lends any support for the proposition that the article 11 right to join or to refuse to join a trade union extends to persons who are outside an employment relationship.

1. At first sight the judgment of the Strasbourg court in Manole v Romania (Application No 46551/06) (unreported) 16 June 2015 is inconsistent with the proposition that an employment relationship is a pre-condition to enjoyment of trade union rights under article 11. The claimants decided to form an association named “Agricultural trade union Romanian Farmers Direct” and applied for its registration with a view to conferring legal personality on it. Its main purpose was to defend the interests of its members, namely farmers and persons providing services for farmers, including transport facilities, to move on from subsistence farming to agriculture which was more directed to the market. To that end it aimed to organise local centres with a view to providing legal information, accountancy advice and judicial assistance to individual farmers. The application for registration was rejected on the ground that only employees holding a contract of employment and civil servants could set up trade unions, to the exclusion of farmers and other self-employed persons who could only join pre-existing trade unions.

1. In its judgment, the Third Section of the Strasbourg court reiterated that under its case-law trade union freedom is not an independent right but a specific aspect of freedom of association as recognised by article 11. Although the ECHR did not precisely define the concept of a trade union beyond a general indication that it is an association formed for the purpose of defending the interests of its members, most of the cases had concerned employees and, more broadly, persons in an employment relationship. Nevertheless, the Contracting States enjoyed a wide margin of appreciation as to how the freedom of trade unions to protect the occupational interests of their members may be secured (paras 59, 60). The Court held that the refusal of “the right to be registered as a trade union-type association” was an interference by Romania with the exercise of the rights guaranteed by article 11 (para 62). The Court went on, however, to conclude that the interference was justified under article 11(2) (para 65).

1. The appellant is, therefore, able to point to Manole as a case where the trade union right was held to apply to an association of self-employed persons. There are, however, several unusual features to this decision. First, the association in question does not appear to have had the attributes of a trade union as opposed to that of a trade association. Its purposes, described above, seem to have been those of a trade association. The Court (at para 62) described it as “a trade union-type association”. Secondly, the decision is entirely explicable as an application of the more general freedom of association conferred by article 11. Thirdly, the reasoning of the Court in concluding that there had been no violation of article 11 might equally have been presented in support of the proposition that the trade union right was not in play here because it does not extend to such bodies. The Court referred (at para 71) to various observations of the ILO but “discerns no sufficient reasons to deduce from those general observations that the exclusion of self-employed farmers from the right to form trade unions amounts to a breach of Article 11 of the Convention”. It noted that the relevant Romanian legislation in no way restricted the applicants’ right to set up trade associations (para 72) and concluded (at para 73):

   “The Court infers that domestic legislation grants agricultural trade organisations the requisite rights for defending their members’ interests before the public authorities without any need to establish such organisations in the form of trade unions, which are now reserved for employees and members of cooperatives, in agriculture just as in all the other economic sectors.”

1. We consider, therefore, that Manole does not detract from the clear authority of The Good Shepherd, a decision of a Grand Chamber, to the effect that the trade union right under article 11 arises only in the context of an employment relationship. (See also, in this regard, the discussion of The Good Shepherd and Manole in National Union of Professional Foster Carers v Certification Officer [2020] ICR 607, paras 57-62.)

1. Mr Jeans sought to draw an analogy with the case law of the Court of Justice of the European Union (“CJEU”). In particular he drew the court’s attention to B v Yodel Delivery Network Ltd (Case C-692/19) [2020] IRLR 550 which concerned the Working Time Directive (Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time (OJ 2003 L 299, p9)). B, who was a parcel delivery courier engaged exclusively for Yodel under a services agreement which stated that he was a self-employed independent contractor, claimed he was a “worker” within the Directive. The Watford Employment Tribunal made a preliminary reference to the CJEU which made a ruling under article 99 of its Rules of Procedure.

1. The CJEU noted that “worker” was not defined in the Directive but that it had an autonomous meaning specific to EU law. The national court was required to base its classification on objective criteria and make an overall assessment of all the circumstances of the case, having regard to the nature of the activities concerned and the relationship of the parties (para 27). The essential feature of an employment relationship was that for a certain period of time a person performed services for and under the direction of another person in return for which he received remuneration (para 29, citing Fenoll v Centre D’Aide par le Travail “La Jouvene” (Case C-316/13) [2016] IRLR 67). It noted that B appeared to have a great deal of latitude in relation to his putative employer. It was therefore necessary for the referring court to consider whether that independence was merely notional and whether there existed a subordinate relationship (paras 35-37). The classification was a matter for the referring court. However, the CJEU expressed its conclusion as follows:

   1. to use subcontractors or substitutes to perform the service which he has undertaken to provide;

   1. to accept or not accept the various tasks offered by his putative employer, or unilaterally set the maximum number of those tasks;

   1. to provide his services to any third party, including direct competitors of the putative employer, and

   1. to fix his own hours of ‘work’ within certain parameters and to tailor his time to suit his personal convenience rather than solely the interests of the putative employer,

      provided that, first, the independence of that person does not appear to be fictitious and, second, it is not possible to establish the existence of a relationship of subordination between that person and his putative employer.”

   “[The Working Time Directive] must be interpreted as precluding a person engaged by his putative employer under a services agreement which stipulates that he is a self-employed independent contractor from being classified as a ‘worker’ for the purposes of that directive, where that person is afforded discretion:

1. While it is understandable that Mr Jeans should seek to rely on similarities between the role of B and that of the Deliveroo Riders in the present appeal, B v Yodel Delivery Network Ltd is a decision in a different context on an entirely different instrument. Moreover, contrary to the submission of Mr Jeans, we do not consider that there is any scope here for the application of the Bosphorus principle (see Bosphorus Hava Yollari Turizm ve Ticaret AS v Ireland (2005) 42 EHRR 1): this is not a case where a member of the Council of Europe is required by a conflicting international instrument to act in a way which infringes Convention rights. Nevertheless, we note the emphasis placed by the Luxembourg court on an examination of the substance of the case as the basis for classification. Furthermore, it is significant that the four features identified by the CJEU as inconsistent with the status of a “worker” are all present in the present case.

1. While the present appeal is limited to the article 11 issue, the approach in domestic law within the United Kingdom to the classification of such working relationships is nevertheless instructive. In Autoclenz Ltd v Belcher [2011] UKSC 41; [2011] ICR 1157 the claimants, who as “valeters” performed car cleaning services which Autoclenz had contracted to provide to third parties, brought proceedings claiming that they were “workers” for the purposes of the legislation conferring the rights to be paid the national minimum wage and to receive statutory paid leave (National Minimum Wage Regulations 1999 (SI 1999/584); Working Time Regulations 1998 (SI 1998/1833)). The employment tribunal held that the claimants came within both limbs of the relevant definition of a “worker” and appeals by Autoclenz were dismissed at every level including the Supreme Court. In the Supreme Court Lord Clarke, with whose judgment the other Justices agreed, drew (at paras 20, 21) a distinction between certain principles “which apply to ordinary contracts and, in particular, to commercial contracts”, and “a body of case law in the context of employment contracts in which a different approach has been taken”. The question whether a contract is a “worker’s contract” within the meaning of the legislation designed to protect employees and other “workers” is not to be determined by applying ordinary principles of contract law such as the parol evidence rule, the signature rule and the principles that govern the rectification of contractual documents on grounds of mistake.

1. In Autoclenz Lord Clarke of Stone-cum-Ebony (at paras 26, 29) expressly approved the approach of Elias J, President of the Employment Appeal Tribunal, in Consistent Group Ltd v Kalwak [2007] IRLR 560 where Elias J observed (at para 57):

   “The concern to which tribunals must be alive is that armies of lawyers will simply place substitution clauses, or clauses denying any obligation to accept or provide work, in employment contracts, as a matter of form, even where such terms do not begin to reflect the real relationship.”

   “In other words, if the reality of the situation is that no one seriously expects that a worker will seek to provide a substitute, or refuse the work offered, the fact that the contract expressly provides for these unrealistic possibilities will not alter the true nature of the relationship. But if these clauses genuinely reflect what might realistically be expected to occur, the fact that the rights conferred have not in fact been exercised will not render the right meaningless.

   …Tribunals should take a sensible and robust view of these matters in order to prevent form undermining substance …”

Elias J emphasised (at paras 58-59) that in this area of the law the court should be alert to look at the reality of any obligations:

1. In Pimlico Plumbers Ltd v Smith [2018] ICR 1511 one of the issues was whether the claimant, Mr Smith, who carried out plumbing work for the appellant company, was a “worker” within section 230(3)(b) of the Employment Rights Act 1996. Section 230(3) defined a “worker” as including not only, at (a), an employee under a contract of service but also, at (b), an individual who has entered into or works under “any other contract … whereby the individual undertakes to … perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual …”. The employment tribunal found that terms and conditions contained in the company’s manual obliged the claimant to work a normal week of 40 hours, that there was no unfettered right to substitute at will, although the company’s operatives could swap jobs, and that there was a high degree of restriction on Mr Smith’s ability to work in a competitive situation. The tribunal held that Mr Smith had not been an employee of Pimlico under a contract of service but that he had been a “worker” of Pimlico within section 230(3)(b) of the 1996 Act. The latter ruling was upheld on appeal to the Employment Appeal Tribunal, the Court of Appeal and the Supreme Court.

1. The particular significance of Pimlico Plumbers for present purposes is what was said about a power of substitution. Lord Wilson observed (at paras 32- 33) that, while the sole test was one of personal performance, the case was one in which it was helpful to assess the significance of Mr Smith’s right to substitute another Pimlico operative by reference to whether the dominant feature of the contract remained personal performance on his part. On the facts of the case, he considered that the right to substitute had been regarded as so insignificant as not to be worthy of recognition in the terms deployed in 2009. Furthermore, Pimlico had accepted that it would not be usual for an operative to take responsibility for performing a job by estimating for it and then to substitute another operative to effect performance. He concluded (at para 34):

   “The tribunal was clearly entitled to hold, albeit in different words, that the dominant feature of Mr Smith’s contracts with Pimlico was an obligation of personal performance. To the extent that his facility to appoint a substitute was the product of a contractual right, the limitation of it was significant: the substitute had to come from the ranks of Pimlico operatives, in other words from those bound to Pimlico by an identical suite of heavy obligations. It was the converse of a situation in which the other party is uninterested in the identity of the substitute, provided only that the work gets done.”

1. In Uber BV v Aslam [2021] UKSC 5, [2021] ICR 657 (“Uber”) the Supreme Court provided further explanation of Autoclenz. In Uber the claimants worked as private hire vehicle drivers, providing transportation services to passengers in London through a smartphone app operated by the appellant companies. The claimants successfully claimed that they were “workers” within the legislation which entitled them to the minimum wage and annual leave (the Employment Rights Act 1996, the Working Time Regulations 1998 and the National Minimum Wage Regulations 2015 (SI 2015/621)). (The relevant statutory definitions were substantially similar to that in section 296(1) of TULRCA.) The Supreme Court rejected Uber’s submission, founded on the terms of the standard-form contracts which the drivers were obliged to sign, that the drivers provided their services to and under contracts with the passengers. It held that the drivers provided their services to and under contracts with Uber and it disregarded contractual provisions to the contrary.

1. Lord Leggatt, with whose judgment the other members of the Supreme Court agreed, noted that Lord Clarke in Autoclenz had made it clear that whether a contract is a “worker’s contract” within the meaning of legislation designed to protect employees and other “workers” was not to be determined by applying ordinary principles of contract law. Lord Leggatt added that what was not, however, fully spelt out in Autoclenz was the theoretical justification for this approach. While it had been emphasised in Autoclenz that in an employment context the parties were frequently of very unequal bargaining power, this was not in general a reason for disapplying or disregarding ordinary principles of contract law, save where Parliament had so provided. Lord Leggatt continued (at paras 69-70):

   “Critical to understanding the Autoclenz case, as I see it, is that the rights asserted by the claimants were not contractual rights but were created by legislation. Thus, the task for the tribunals and the courts was not, unless the legislation required it, to identify whether, under the terms of their contracts, Autoclenz had agreed that the claimants should be paid at least the national minimum wage or receive paid annual leave. It was to determine whether the claimants fell within the definition of a “worker” in the relevant statutory provisions so as to qualify for these rights irrespective of what had been contractually agreed. In short, the primary question was one of statutory interpretation, not contractual interpretation.

   The modern approach to statutory interpretation is to have regard to the purpose of a particular provision and to interpret its language, so far as possible, in the way which best gives effect to that purpose.”

1. These decisions were made in different legal contexts from the article 11 issue which arises for consideration on this appeal. (Lord Hendy has correctly acknowledged that he could not rely on Uber to attempt to re-open the refusal of permission to appeal on the domestic law issues.) Nevertheless, they are instructive because they emphasise the need to focus on the reality of the situation. In particular, the label that the parties put on a relationship will not be determinative. Furthermore, the normal rules of contractual interpretation do not apply in that the courts can and must look at how the contract operates in practice. It is necessary to ascertain whether particular freedoms conferred by the agreement on which the putative employer relies to negate the existence of an employment relationship are not only genuine (in the sense of not being a sham disguising the fact that the worker is effectively bound not to take advantage of that freedom) but also actually affect the way in which services are performed.

1. It is necessary to say something further concerning ILO Recommendation No 198 which was considered by the Strasbourg court in The Good Shepherd.

1. The preamble to the Recommendation refers to “the difficulties of establishing whether or not an employment relationship exists in situations where the respective rights and obligations of the parties concerned are not clear, where there has been an attempt to disguise the employment relationship, or where inadequacies or limitations exist in the legal framework, or in its interpretation or application”.

1. Part II is entitled “Determination of the Existence of an Employment Relationship” and includes the following provisions:

   1. For the purposes of the national policy of protection for workers in an employment relationship, the determination of the existence of such a relationship should be guided primarily by the facts relating to the performance of work and the remuneration of the worker, notwithstanding how the relationship is characterized in any contrary arrangement, contractual or otherwise, that may have been agreed between the parties.

   1. Members should promote clear methods for guiding workers and employers as to the determination of the existence of an employment relationship.

      …

   1. Members should consider the possibility of defining in their laws and regulations, or by other means, specific indicators of the existence of an employment relationship. Those indicators might include:

   1. the fact that the work: is carried out according to the instructions and under the control of another party; involves the integration of the worker in the organization of the enterprise; is performed solely or mainly for the benefit of another person; must be carried out personally by the worker; is carried out within specific working hours or at a workplace specified or agreed by the party requesting the work; is of a particular duration and has a certain continuity; requires the worker’s availability; or involves the provision of tools, materials and machinery by the party requesting the work;

   1. periodic payment of remuneration to the worker; the fact that such remuneration constitutes the worker’s sole or principal source of income; provision of payment in kind, such as food, lodging or transport; recognition of entitlements such as weekly rest and annual holidays; payment by the party requesting the work for travel undertaken by the worker in order to carry out the work; or absence of financial risk for the worker.”

1. We gratefully adopt the following summary by Underhill LJ in the Court of Appeal in the present proceedings (at para 62) as to the effect of these provisions:

   “Overall, the approach taken in [ILO Recommendation No 198] to identifying an employment relationship broadly parallels that taken in domestic law in identifying the characteristics not only of a contract of service, but also of a ‘worker contract’. It recognises an underlying concept of ‘subordination’; it identifies a number of familiar indicators of the existence of such a relationship; and it enjoins a focus on the realities of the relationship and being alert to attempts to disguise it.”

1. From all these materials we derive the following principles:

   1. The category of persons who benefit from the right to form and join a trade union under article 11 is a smaller sub-class of those – described as “everyone” in the opening of article 11(1) – who enjoy the right to freedom of peaceful assembly and to freedom of association with others conferred under that article. Although Lord Hendy initially argued on this appeal, as he had argued in the courts below, that the right to form and join a trade union was enjoyed by everyone, he did not pursue this submission and accepted that the rights on which the Union is seeking to rely are conferred on persons in the context of an employment relationship. This concession was, in our view, correctly made and compelled by the Strasbourg authorities considered above. We will refer to the class of people on whom article 11 trade union rights are conferred as “article 11 workers”.

   1. The concept of an employment relationship within article 11 is an autonomous concept that must apply across all the members of the Council of Europe and does not depend on the definitions of workers or employees used in domestic law.

   1. In determining whether there is an employment relationship within article 11, the court should consider, inter alia, the factors set out in ILO Recommendation No 198 as referred to in The Good Shepherd (at paras 57 and 142). (See paras 41, 57 to 59 above.) This approach is not inconsistent with the strictures in R (SC) v Secretary of State for Work and Pensions [2021] UKSC 26, [2022] AC 223 (at paras 2(7)(i), 74-96) against reliance on the provisions of international treaties and instruments which have not been implemented into domestic law. Although the ILO made recommendations to Member States in relation to the identification of an employment relationship in any particular case, in The Good Shepherd the Strasbourg court expressly adopted and applied the criteria. They are, as a result, incorporated into the Convention test for the identification of an employment relationship under article 11.

   1. The correct approach requires the application of a multifactorial test, focusing on the practicalities of the relationship and how it operates in reality.

1. Lord Hendy argued that the court should adopt a purposive construction of article 11. In his submission, the key feature of the relationship was that the putative workers were in a subordinate position with unequal bargaining power as regards the setting of their occupational interests. People in such a position, he submitted, needed collective bargaining so as to be able to establish fair working conditions. They should, therefore, be included within the scope of those on whom article 11 trade union rights are conferred. Lord Hendy sought to draw support for this approach from the observation of Underhill LJ in the Court of Appeal that it might at first sight seem counter-intuitive that the Riders were not able to insist that Deliveroo negotiate with the Union:

   “It is easy to see that riders might benefit from organising collectively to represent their interests as against Deliveroo, and it might seem to follow that they should have the right “to join and form a trade union for the protection of [those] interests.” (at para 86)

In this regard Lord Hendy also drew our attention to the decision of the European Committee of Social Rights in Irish Congress of Trade Unions (ICTU) v Ireland (2018) 68 EHRR SE6.

1. While we agree that a purposive approach should be adopted to the issue of interpretation (see Uber per Lord Leggatt at para 70), we disagree with Lord Hendy’s proposed approach. There is in our view no support for it in the case law. There are many situations in which persons are in a position of unequal bargaining power and are offered contractual terms on a take it or leave it basis. However, that does not mean that they are entitled to band together and require the counterparty to negotiate with them collectively.

1. On behalf of the second respondent, Mr Jeans agreed that the test for an employment relationship under article 11 is a multifactorial test. In his submission, however, an employment relationship within article 11 exists in cases falling within section 296(1)(a) of TULRCA (“limb (a)”) but not in cases falling within section 296(1)(b) (“limb (b)”) because limb (b) is simply an extension in domestic law conferring rights on a class of persons who do not benefit from article 11 trade union rights. He argued that most European countries recognise a bifurcation between true employees on the one hand and self-employed persons on the other and that workers’ rights are generally limited to the former. In this regard he submitted that the United Kingdom is unusual in recognising an intermediate category. (See Bates van Winkelhof v Clyde & Co LLP [2014] UKSC 32, [2014] ICR 730, per Baroness Hale of Richmond DPSC at para 25.)